Credit Card Tutorials

The Effects of Closing A Credit Card Account

With more and more people getting in trouble with credit cards, they are deciding whether after they pay the cards off, if closing the account would be the best option. In many cases, it may be the best choice. However, there are both positive and negative affects and can have consequences on your credit score that irreversible. And these affects on credit scores are something that most people do not even realize.

For starters, when you cancel a line of credit, there are affects to your credit score. In many instances, even if the line of credit is not being used, it shows future creditors that you close out accounts if they are not being used. It sends a message that you do not feel comfortable in holding credit lines that are waiting to be used. More than likely, future creditors may not hold this against you. However, in some cases creditors only want to give lines of credit to customers that are able to keep it open for a long period of time because it increases the chances that the consumer will use it. (more…)